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How to profit from shares
Learn from the stock market greats
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A great way of developing your own stock picking strategy is to base it on somebody else's successful technique. This feature lists eight great investors whose investment philosophies can be used as a foundation for your stock market ventures.
Benjamin Graham is widely regarded as the Father of Value Investing. His books, Security Analysis and The Intelligent Investor, pioneered the concept of making money through 'undervalued' shares. Co-authored with David Dodd and published in 1934, Security Analysis is an epic tome, describing in detail how to analyse a company's financial statements. However, penned in 1949, The Intelligent Investor is the book Graham is most well known for.
You could say Philip Fisher was the stock market's first 'tech investor'. Originally published in 1958, his book, Common Stocks and Uncommon Profits, broke new ground in explaining how investors could judge fast growing, innovative companies. Fisher famously used his techniques to pinpoint the likes of Motorola and Texas Instruments in the mid-1950s, two stocks that registered substantial gains over the following decades.
Warren Buffett is arguably the world's greatest investor. His $40bn fortune certainly makes him one of the world's richest men. But alongside the enormous wealth, Buffett's reputation is enhanced by the annual letters he writes to the shareholders of his investment vehicle, Berkshire Hathaway. Freely available to all, the shareholder letters outline the investment strategy that has served him well for over 40 years.
Although professional fund managers tend to have a poor reputation, a few do stand out. Peter Lynch ran the Fidelity Magellan Fund between 1977 and 1990. Anybody putting in $1,000 when Lynch took control would have seen the investment balloon to $28,000 by the time he retired. The techniques that helped Lynch record the near 30% per annum return are encapsulated in his three books, the best of which is probably One Up On Wall Street.
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